NVIDIA and AMD have strong demand, and the market is optimistic that ASE operations will benefit
Nvidia, AMD and other chip manufacturers have benefited from strong demand for HPC, with advanced wafer manufacturing processes maintaining full capacity. CoWoS is in short supply, and the market is optimistic that ASE (3711) will increase its WoS production capacity in the later stage, which will be beneficial for operational performance.
The French entry agency stated that cloud service providers (CSPs) such as Microsoft, Amazon, Meta, and Google are actively expanding their AI server data centers, and Apple will also join this AI computing power battle, maintaining high-end order momentum for AI and HPC supply chains such as NVIDIA and AMD. The new generation HPC of Nvidia's Blackwell architecture is currently in mass production at TSMC and is expected to enter the testing phase by the end of this year. It will be shipped to OEM and ODM factories in the first quarter of next year.
High performance computing (HPC) orders such as B200 and GB200 are stronger than the previous Hopper architecture H100. Due to concerns about supply constraints, CSP factories have started to order Rubin architecture HPC chips. In addition, AMD will launch the MI350 product built on the CDNA4 architecture in the first half of next year, and produce the MI400 high-speed computing chip with the Next architecture in 2026, actively expanding the semiconductor supply chain's production capacity.
ASE's Siliconware has secured WoS and testing orders for two new HPC chips from major manufacturers. Currently, Siliconware's subsidiary, Zhongke Factory, and Zhongke Second Factory are about to complete the establishment of clean rooms, and machine equipment will gradually begin to enter. It is estimated that new production capacity is expected to increase by at least 20%. Not only has demand grown significantly this year, ASE is actively preparing for the HPC business opportunity of the two major manufacturers' new architecture in 2026, and production capacity is expected to expand again at that time.
ASE originally estimated that capital expenditures would increase by more than 40-50% annually this year, about 1.2-1.4 billion US dollars. In April, an additional 10% of capital expenditures will be spent on testing related equipment, bringing capital expenditures to 1.3-1.5 billion yuan, an annual increase of 45-70%. Due to the expected significant increase in demand for advanced ATM technology, capital expenditures for 2024 were raised again in August to $1.828 billion, approximately doubling from last year. The proportion of capital expenditure this year is 53% for packaging, 38% for testing, approximately 8% for EMS, and 1% for materials.
Analysts said that ASE's revenue in August increased by 2.5% month on month and 1.2% year on year, and it will return to its previous operating trajectory this year. The second half of the year is the traditional peak season, and the Philippines and South Korea factories, which previously acquired Infineon, will contribute to revenue in the third quarter. It is expected that the group's merged gross profit margin will increase in the third quarter compared to the previous quarter, with a quarterly earnings per share (EPS) of NT $1.96 and a full year outlook of NT $7.24.
High performance computing (HPC) orders such as B200 and GB200 are stronger than the previous Hopper architecture H100. Due to concerns about supply constraints, CSP factories have started to order Rubin architecture HPC chips. In addition, AMD will launch the MI350 product built on the CDNA4 architecture in the first half of next year, and produce the MI400 high-speed computing chip with the Next architecture in 2026, actively expanding the semiconductor supply chain's production capacity.
ASE's Siliconware has secured WoS and testing orders for two new HPC chips from major manufacturers. Currently, Siliconware's subsidiary, Zhongke Factory, and Zhongke Second Factory are about to complete the establishment of clean rooms, and machine equipment will gradually begin to enter. It is estimated that new production capacity is expected to increase by at least 20%. Not only has demand grown significantly this year, ASE is actively preparing for the HPC business opportunity of the two major manufacturers' new architecture in 2026, and production capacity is expected to expand again at that time.
ASE originally estimated that capital expenditures would increase by more than 40-50% annually this year, about 1.2-1.4 billion US dollars. In April, an additional 10% of capital expenditures will be spent on testing related equipment, bringing capital expenditures to 1.3-1.5 billion yuan, an annual increase of 45-70%. Due to the expected significant increase in demand for advanced ATM technology, capital expenditures for 2024 were raised again in August to $1.828 billion, approximately doubling from last year. The proportion of capital expenditure this year is 53% for packaging, 38% for testing, approximately 8% for EMS, and 1% for materials.
Analysts said that ASE's revenue in August increased by 2.5% month on month and 1.2% year on year, and it will return to its previous operating trajectory this year. The second half of the year is the traditional peak season, and the Philippines and South Korea factories, which previously acquired Infineon, will contribute to revenue in the third quarter. It is expected that the group's merged gross profit margin will increase in the third quarter compared to the previous quarter, with a quarterly earnings per share (EPS) of NT $1.96 and a full year outlook of NT $7.24.